How to set up cash discounts, when customer pay early?

Cash discounts are an incentive (usually a small percentage) that you offer to customers in return for paying a bill owed before the scheduled due date. If used properly, cash discounts improve the Days Sales Outstanding aspect of a business's cash conversion cycle.

For example, a typical cash discount would be: you offer a 5% discount on an invoice due in 30 days if the customer were to pay within the first 5 days of receiving the invoice.